Archive for the ‘Global Economy’ Category

No Pain, No Gain

Thursday, May 27th, 2010

The P90X workout, which is extremely tough but creates results, can be seen as the metaphor for the future of financial fitness.

The workout program, created by Tony Horton, has sold more than two million sets of its DVD series, at $119.85 per set. The selling point is that the workout is really, really hard. Some of the comments from those who do the program include: “When I first started the leg workouts, it made me want to puke in the middle”; “It’s awful. It doesn’t matter how many times you do it, it still makes you cry.” (Miami Herald, 5/18/10)

When will individuals and government leaders determine that in order to correct financial excesses (debt and spending), a painful but effective discipline is necessary? And who will be the Tony Horton of the program? One workout attendee, whose shirt was sopping-wet after the strenuous ordeal, proclaimed; “Tony is the man. Tony is the man”. Who will be “the man” (or woman) of financial fitness?

Charles Hess

Posted in Global Economy, State and Local Governments | No Comments »

Labor Getting Crowded Out?

Tuesday, May 4th, 2010

Companies have gotten lean during the recession, and in many cases that has led to increased profits. Technology has advanced to the point where mobile applications, real-time online collaboration and video conferencing provide inexpensive alternatives to having workers in an office, and the Internet allows companies to easily access brain power across the globe.

Tom Ringo, the head of IBM Human Capital Management (the consultancy arm of the company), said the firm’s global workforce of 390,000 permanent employees could be reduced to 100,000 by 2017, the date by which IBM is due to complete its HR transformation program. Ringo said the firm would employ “crowd- sourcing” and re-hire workers as contractors for specific projects when necessary, adding, “There would be no building costs, no pensions, and no healthcare costs, making huge savings.” An IBM spokesman later said Ringo’s comments were without merit. (Personnel Today, 4/23/10)

Whether IBM actually makes the transition to a mostly crowd-sourced workforce or not, the fact that it has discussed the possibility is significant. The expectation has been that hiring would increase not long after economic growth, but has this recession taught companies new lessons about the merits of lean staffing and the possibilities of technology? Might we see a significant segment of the U.S. labor force become permanent freelancers, doing work on demand?

Eric Zavolinsky

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Posted in Brain Trade, Business Spending, Global Economy, Internet, Tech, Telecom, Media | No Comments »

Micro-lending in the USA

Thursday, April 22nd, 2010

Since 1976 Grameen Bank has provided micro-loans to low-income individuals – mostly women – in its home country of Bangladesh, and the repayment rate for those loans has been substantially higher than traditional loans in that country. Grameen Bank and its founder, Muhammad Yunus, split the 2006 Nobel Peace Prize. Now the institution is offering such loans in the United States, with two branches in New York, one in Omaha and others planned for Washington, D.C. and San Francisco. (US Banker, 4/10)

Grameen America focuses only on borrowers who are below the poverty line, and commercial banks that provide funds to the microlender are granted credits under the Community Reinvestment Act. How curious that a Third World financial institution is finding an attractive market in the U.S.

Ken Hey

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Posted in Finance, Global Economy | No Comments »

Bringing It Home

Wednesday, January 13th, 2010

Despite cutting costs in 2009, many companies in Germany and the rest of Europe appear to be less interested in outsourcing, and some companies in Germany are even bringing manufacturing back home.

In 2009, three German companies continued to outsource work abroad for every one company that brought formerly outsourced jobs home. In 2003, six companies were sending jobs overseas for every one returning jobs home. An October survey by Cognizant found that 40 percent of European companies cut back outsourcing plans in 2009.  (Newsweek, 1/11/10)

This could be evidence of slackening demand or anticipated slackening demand. Or it could be a nationalist shift in attitude about production and labor. But, either way, this is a negative for shippers.

Eric Zavolinsky

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Posted in Global Economy, shipping | 1 Comment »